Friday, 15 July 2011

CHAMPAGNE - TO INVEST OR NOT TO INVEST?

It is surprising that I am not often asked if investing into Champagne is feasible. Champagne is not Bordeaux, that is true but unlike Bordeaux there is no actual trend in investing into Champagne other then for consumption. Well, at least not that I noticed. I have also discovered that some people will attempt to invest into Champagne as an asset but then either end up consuming it or underselling at auctions.

So what is the problem?

There are actually a few. First Champagne is an effervescent drink and if stored for a prolonged period of time the sparkle diminishes and eventually it becomes flat/still. Second the history of Champagne and its story is not so much about investing into it, but consuming. Third, Champagne has evolved rapidly over the past hundred years from being extra sweet to being extra dry so they we suited for the trends of the time, confirming that sparkle is the key to Champagne's success. Also the history of people recognising the potential of Champagne has over the past 30 years grown exponentially, but still has not reached the fame of Bordeaux. Which is also another problem, that there aren't many people who have the chance to sample historically important vintages and therefore the knowledge of those who might have an idea of Champagne's investment potential is pretty limited.

I can tell you exactly the content of my cellar. But my greatest interest is watching the wines develop over a period of time. Yes, the best vintage worthy of substantial financial investment (I mean get few hundred bottles if you still can) is 1990 and if chance, funds and knowledge permitted me to do that I would invest in the following:
Bollinger Grande Annee
Bollinger RD
Bollinger VVF
Veuve Clicquot La Grande Dame
Taittinger Comtes de Champagne
Taittinger Vintage
Salon
Krug Clos du Mesnil (Only)
Louis Roederer Blanc de Blancs (Only)
Pol Roger Vintage
Perrier - Jouet Belle Epoque Blanc de Blancs
Delamotte Vintage Blanc des Blancs
Dom Ruinart Blanc de Blancs

and that should be enough. I cannot say I am biggest fan of the 1990 but from what I drank, I could tell which harvests have had a long term potential and with 1990 we still have few decades.

There have been other vintages which were great in Champagne. My personal favourite is ultimately 95 but its aging potential has not been that great but some wines...are always in any year, just as much as there are years/harvests in any house, always an exception.

I also think that investment into Champagne is not so much about the return on investment in the direct sense, as in reselling at auctions (this however is potentially viable with the 1990) but also a brilliant PR strategy. How many exclusive parties specify the vintage of the Champagne consumed? Does anyone care? Unfortunately the group of people that does care, because it is so rare to find old vintages, is so niche that it probably does not yet make sense. However if we look into the biggest Champagne markets outside of France such as U.K., U.S.A. and Japan, in these countries the average consumer of Champagne is a little more discerning than in other countries (at least such is my hope) so if the trend continues not only of high consumption but also of greater education, this becomes a potentially long term strategy to which it is worth investing.

The buzz of investing into Champagne will define itself in a few decades when, the consumption will have increased and great number of people will have attached some sort of sentimental value to a specific vintage if not more so that the desire to relive 'such moment' will be more psychologically undertoned even though their desired vintage may not be the best that there was. Furthermore, there will be growing demand and also increased supplied due to changes in legislation and recent events of contemporary society which has not only seen a crisis but also a decline in consumption of vintages which are now patiently waiting in the cellars of producers (not jsut to be stored perfectly) but also to show the potential.